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Combating Money Laundering in Real Estate

Why is the real estate industry at risk of financial crime?

Real estate is an attractive target for those looking to hide the proceeds of crime. It allows large quantities of cash to be laundered in a single transaction, and the real estate sector has notoriously lax controls around money laundering.

According to the Financial Action Task Force (FATF), real estate accounted for a third of criminal assets confiscated worldwide between 2011 and 2013. Concern is growing in many cities around the world that high-value residential real estate has become vulnerable to criminals using shell or offshore companies to conceal their identity.

Accuity perspective

We believe the real estate sector will be the next focus of attention for regulators and governments in the fight against financial crime. We have conducted a review of how anti-money laundering (AML) and counter-terrorist financing (CTF) legislation, developed for the financial services sector, is beginning to spill over into real estate transactions in key jurisdictions around the world.

New AML compliance obligations will require real estate firms and professionals to carry out more detailed due diligence on customers, put in place robust compliance processes and report on their compliance processes to regulators. Every professional involved in real estate transactions – agents, brokers, title insurance companies, real estate managers, legal firms and lenders – needs to be prepared for the change ahead.

Take a deeper dive into the research and our thinking on how the real estate sector needs to adapt, by reviewing the content below.

“Compliance with these new regulations for the DNFBP sector is not just about meeting the expectation of regulators, but more importantly, it serves as the defence to combat crimes such as money laundering and terrorism"

Bharath Vellore

Managing Director APAC

Accuity

To combat such financial crimes, businesses must go beyond an approach of just ticking the checklist boxes. Leveraging data and technology will ensure that AML/KYC compliance is both effective and efficient"